Treasury bill, or short-term US debt paper, has historically ranged between 15% and 20%. In recent months, this percentage of T-bill of total US debt has broken above 20% and it might well be on it‘s way to 25% (or even higher).
As institutions like pension funds are starved from getting long-dates securities, other have been buying the short end. Who? Banks, credit providers as well as the infamous US stablecoiner provider Tether.
Why is this significant?
This is covet yield curve control or yield supression because it supresses the long-end of the curve.
As a matter of fact, the yield of long-dated treasuries should actually be higher, about 100 basis points by conservative estimates.
The question we need to ask is how will the US get investors back into long-dated treasuries?
-Bring down short-term policy rates (significantly) to make long-end debt more attractive.
-Push for a recession to create save haven demand for long-term treasuries (beat steepener). Rather improbable, no?
-Go new ways. For example, as preston (npub1s5y…6q7z) has explained, what if the US Treasuries were to back long-dated bonds with a Bitcoin component. Could this be enticing enough for regular investors to buy into long-end Treasuries?
pahueg / Pascal Hügli
npub1qh…n04l8
2024-08-31 15:29:14
Author Public Key
npub1qhx7lnggpv64f0wt5xyjj7h90qh5ewu35pspr66sj8alc4gvcfjqqn04l8Published at
2024-08-31 15:29:14Event JSON
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"content": "Treasury bill, or short-term US debt paper, has historically ranged between 15% and 20%. In recent months, this percentage of T-bill of total US debt has broken above 20% and it might well be on it‘s way to 25% (or even higher).\n\nAs institutions like pension funds are starved from getting long-dates securities, other have been buying the short end. Who? Banks, credit providers as well as the infamous US stablecoiner provider Tether.\n\nWhy is this significant?\n\nThis is covet yield curve control or yield supression because it supresses the long-end of the curve.\n\nAs a matter of fact, the yield of long-dated treasuries should actually be higher, about 100 basis points by conservative estimates.\n\nThe question we need to ask is how will the US get investors back into long-dated treasuries?\n\n-Bring down short-term policy rates (significantly) to make long-end debt more attractive.\n\n-Push for a recession to create save haven demand for long-term treasuries (beat steepener). Rather improbable, no?\n\n-Go new ways. For example, as nostr:npub1s5yq6wadwrxde4lhfs56gn64hwzuhnfa6r9mj476r5s4hkunzgzqrs6q7z has explained, what if the US Treasuries were to back long-dated bonds with a Bitcoin component. Could this be enticing enough for regular investors to buy into long-end Treasuries?",
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